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5 Steps to a Squeaky Clean Credit Rating

April 28, 2016

When it comes to applying for car finance, bad credit scores can seem like they’re getting in the way of a good deal. If your lending history is less than perfect, you may be finding it difficult to get your hands on a competitive payment plan – or even to secure a deal in the first place – but bad credit car finance means your past doesn’t have to dictate your future.

Car finance for bad credit holders does exist – but there are a few things you can do to make yourself a more attractive prospect to loan companies. Lenders will run a credit check to calculate how much they should lend and, in many cases, what level of interest to charge – which is precisely why your credit score plays such a key role in your finance options.
Today we’re taking a look at a few things you can do, starting today, to clean up your credit rating and get one step closer to a competitive car finance deal.

clean credit rating

  1. Get a credit check

If you have poor credit, start by checking your credit score – which you can do through sites like Experian, Equifax or Callcredit, at little expense. You can use a credit score calculator or access a full credit report to check for mistakes and identify areas which are dragging your score down. In some cases, a bad credit score can be the result of fraud – so make sure you dispute any discrepancies with the credit rating agency. If it’s a genuine mistake, it should be easily resolved and removed from your credit report.

  1. Get on the electoral role

It’s a straightforward process to register with your local council and put yourself on the electoral role – not to mention being a good first step to resolving your poor credit. Car finance can be seriously affected when an applicant isn’t on the electoral role – so even if you have no intention of voting, make sure you’re still on there to prevent this from affecting your score.

  1. Cancel unused credit cards

Not only will this eliminate the temptation to use them again, but it will also reduce the likelihood of fraud being committed on them if they were to be lost or stolen. On the journey to improving a poor credit rating, you need to guarantee that you’ve eliminated any potential risk areas that could have a negative impact.

  1. Stop applying for credit

If you’re continually being declined for credit, you know it’s time to do something about your credit score – so stop applying and take action. Making a series of unsuccessful applications will have no impact other than further harming your score – so be selective in your pursuit of a loan and make the necessary improvements in the meantime.

  1. Pay your bills on time

Improving your credit rating can be as simple as making sure you pay on time. Every time you miss a repayment on a credit card, mortgage or loan, it can negatively affect your credit score – particularly where continually missed or late payments are concerned. Show lenders you’re reliable with prompt repayments.

‘Credit builder’ credit cards are also available, which can help to boost your overall score. Providing you keep up with timely payments, they will record a period of successful payments on your official credit record – and indicate an ability to successfully borrow money.

At The Car Loan Warehouse, we specialise in car finance deals for people with bad credit scores. With a number of flexible finance options available, we’re here to help. If you’re looking for a loan without being held back by your credit history, apply now for a decision within the hour – or get an instant estimate with our car finance calculator.

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About The Author

Jon Le Roux is co-founder and company director of The Car Loan Warehouse. Being a mad engineering and motorsport enthusiast, I spend more hours than is healthy, watching, reading or talking about cars, boats, motorbikes…..basically anything with an engine.